2025 State Income Tax Rates and Brackets

2025 State Income Tax Rates and Brackets

13 Jun 2025 | 01:17 PM

Nine states do away with collecting state income tax altogether. Missouri is implementing a slight change to the graduated rates for 2025. The top marginal income tax rate will decrease from 4.8% to 4.7%. Under Missouri Senate Bills 3 and 5, there will be .1% decreases for the next two years to reach a top rate of 4.5%.

• Chris Hutchison helped build NerdWallet’s editorial operation and has directed coverage across banking, investing, taxes and insurance.
• As is the case for federal returns, the amount you’ll pay to your state is also a function of your filing status, whether you have dependents, and whether you qualify for tax deductions and credits.
• As part of its comprehensive tax reform, effective January 1, 2025, Iowa consolidated its three tax brackets into a single bracket with a rate of 3.8 percent, joining the group of states with flat individual income taxes.
• Unlike federal income tax (which applies nationwide), state income tax rates vary significantly from state to state in terms of rates and structures.
• (set at $15,000 for single filers and $30,000 for joint filers in 2025) while suspending the personal exemption by reducing it to $0 through 2025.

State Individual Income Tax Rates and Brackets, 2018

The flat rate tax in North Carolina reduces from 4.5% to 4.25% in 2025. This is part of a phased reduction plan to ultimately bring the rate to 3.99%. While living in a no-income-tax state allows residents to keep more of their paycheck, it’s QuickBooks Accountant important to consider the trade-offs. Essential services like education and infrastructure may receive less funding, and other taxes or costs of living may be higher to compensate.

How Paycor Helps You Manage Income Taxes

Employees with lower wages may feel the tax burden more acutely than higher earners. Understanding these dynamics can help HR teams better support staff with financial wellness planning and relocation decisions. Several states try to keep things simple by applying the same tax rate to recording transactions most income. This means, for example, that a couple who made $500,000 will be taxed at the same rate as a couple who made $75,000.

State Individual Income Tax Rates and Brackets, 2024

Louisiana also repealed its graduated income tax in favor of a flat rate. The new income tax rate starting with tax year 2025 is 3%. States with flat tax systems apply the same tax rate to all taxable income, regardless of how much a person earns. While this approach is simpler to administer and calculate, it doesn’t account for differences in income levels.

Historical State Individual Income Tax Rates

Taxpayers who take the standard deduction cannot also itemize their us state income tax rates deductions; it serves as an alternative. (set at $15,000 for single filers and $30,000 for joint filers in 2025) while suspending the personal exemption by reducing it to $0 through 2025. Most states use the federal tax code as the starting point for their own income taxes, but states vary in their approaches to bringing in the federal standard deduction and (currently suspended) personal exemption. Some states are conformed to out-of-date versions of the Internal Revenue Code (IRC), with California, which uses a 2015 (pre-TCJA) conformity date, as the most extreme case.

• The law also repealed previously enacted tax triggers, instead prescribing a rate reduction to 2.95 percent in 2026, and 2.9 percent in 2027 and beyond.
• The new income tax rate starting with tax year 2025 is 3%.
• This means, for example, that a couple who made $500,000 will be taxed at the same rate as a couple who made $75,000.
• Effective January 1, 2025, the tax rate goes down from 4.7 percent to 4.4 percent (applied on taxable income exceeding $10,000).
• But if you moved to another state during the year, lived in one state but worked in another, or have, say, income-producing rental properties in multiple states, you might need to file more than one state return.
• Our partners cannot pay us to guarantee favorable reviews of their products or services.